IMF's Dominique Strauss-Kahn faces sex charge

IMF chief Dominique Strauss-Kahn was arrested and charged with sexually assaulting a New York hotel maid, in a scandal that appeared to wreck his hopes of running for president of France.

The charges threatened to create a leadership vacuum at the IMF, overseer of the global economic system, and threw wide open the French presidential election next April, for which opinion polls had made Strauss-Kahn the front-runner.

One of his lawyers, Benjamin Brafman, told reporters that his client "will plead not guilty."

The 62-year-old Socialist, a key player in the response to the 2007-9 global financial meltdown and in Europe's debt crisis, was taken off an Air France plane about to leave for Paris from John F Kennedy International Airport on Saturday.

The news caused shock and disbelief in France, where a government spokesman called for caution and respect for the presumption of innocence.

"The news we received from New York last night struck like a thunderbolt," said Socialist leader Martine Aubry, appealing for party unity.

Francois Bayrou, a centrist opponent of Strauss-Kahn, said: "All this is completely astounding, immensely troubling and distressing. If the facts prove true ... it's something degrading for all women. It's terrible for the image of France."

Far-right leader Marine Le Pen said her rival's presidential hopes had been crushed. Strauss-Kahn and Le Pen have led recent opinion polls ahead of conservative President Nicolas Sarkozy, even though the chief of the International Monetary Fund had yet to declare his candidacy.

The Fund said in a statement on its website that it "remains fully functioning and operational," and had no comment on the case.

New York police spokesman Paul Browne said Strauss-Kahn was arrested at 2:15 a.m. EDT on Sunday on charges of a criminal sexual act, attempted rape and unlawful imprisonment.

"We must wait until things settle and see if it's true or a provocation, one of Strauss-Kahn's French-based lawyers, Leon Lef Forster, said. "We must be especially careful not to get into a media circus and we must wait until things are clear."

A 32-year-old maid filed a sexual assault complaint after fleeing the US$3,000-a-night hotel suite at the Sofitel in Times Square where the alleged incident occurred around 1 p.m. EDT on Saturday, Browne said.

Strauss-Kahn appeared to have fled the hotel after the incident, the police spokesman said.

Browne told reporters: "She told detectives he came out of the bathroom naked, ran down a hallway to the foyer where she was, pulled her into a bedroom and began to sexually assault her, according to her account.

"She pulled away from him and he dragged her down a hallway into the bathroom where he engaged in a criminal sexual act, according to her account to detectives. He tried to lock her into the hotel room."

Strauss-Kahn does not have diplomatic immunity, Browne said. He is expected to be brought before a state court on Sunday.

According to New York state law, a criminal sexual act carries a potential sentence of 15-20 years, the same as attempted rape. Unlawful imprisonment carries a potential sentence of three to five years.

The allegation is a major embarrassment to the IMF, which has authorized billions of dollars of lending to troubled countries and played a major role in the euro zone debt crisis.

It follows a statement on Thursday that the IMF's No. 2, John Lipsky, plans to step down in August when his term ends.

A crisis of leadership at the Fund would especially worry European countries, given Strauss-Kahn's pivotal role in brokering bailouts for Iceland, Hungary, Greece, Ireland and Portugal.